Regulations Amending the Commercial Vehicle Drivers Hours of Service Regulations (Electronic Logging Devices and Other Amendments): SOR/2019-165

Canada Gazette, Part II, Volume 153, Number 12

Registration
SOR/2019-165 June 3, 2019

MOTOR VEHICLE TRANSPORT ACT

P.C. 2019-599 May 31, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to section 16.1 footnote a of the Motor Vehicle Transport Act footnote b, makes the annexed Regulations Amending the Commercial Vehicle Drivers Hours of Service Regulations (Electronic Logging Devices and Other Amendments).

Regulations Amending the Commercial Vehicle Drivers Hours of Service Regulations (Electronic Logging Devices and Other Amendments)

Amendments

1 (1) The definition sleeper berth in section 1 of the Commercial Vehicle Drivers Hours of Service Regulations footnote 1 is repealed.

(2) The definitions daily log and electronic recording device in section 1 of the Regulations are repealed.

(3) The definitions of federal director and on-duty time in section 1 of the Regulations are replaced by the following:

(4) The definitions home terminal, principal place of business and supporting document in section 1 of the Regulations are replaced by the following:

(5) The definitions directeur and mauvaises conditions de circulation in section 1 of the French version of the Regulations are replaced by the following:

(6) Paragraph (b) of the definition commercial vehicle in section 1 of the Regulations is replaced by the following:

(7) Paragraphs (a) and (b) of the definition driver in section 1 of the English version of the Regulations is replaced by the following:

(8) Paragraph (b) of the definition oil well service vehicle in section 1 of the English version of the Regulations is replaced by the following:

(9) Paragraph (a) of the definition véhicule utilitaire in section 1 of the French version of the Regulations is replaced by the following:

(10) Section 1 of the Regulations is amended by adding the following in alphabetical order:

(11) Section 1 of the Regulations is amended by adding the following in alphabetical order:

2 The Regulations are amended by adding the following after section 1:

1.1 (1) For the purposes of these Regulations, every reference to “HOS Regulations” in the Technical Standard shall be read as a reference to these Regulations.

(2) For the purposes of these Regulations, provision 4.3.2.2.4(c)(3) of the Technical Standard is to be read as “When option 2 is selected, the ELD must prompt the user to enter for each 24-hour period for each of the previous 14 days immediately before the current day, the number of hours for on-duty time and off-duty time.”.

(3) For the purposes of these Regulations, “the latest database provided by the ELD Certification entity” in provisions 4.4.2(b) and 7.29 of the Technical Standard is to be read as “the Canadian Geographical Names Database established by Natural Resources Canada”.

(4) For the purposes of these Regulations, “must be between 04 and 11” in provision 7.41 of the Technical Standard is to be read as “must be between 03 and 08”.

3 (1) Subsection 2(1) of the Regulations is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (b), and by repealing paragraph (e).

(2) Subsection 2(2) of the Regulations is repealed.

4 Paragraphs 4(a) and (b) of the Regulations are replaced by the following:

5 Paragraph 16(e) of the Regulations is replaced by the following:

6 (1) Subsection 18(1) of the Regulations is amended by adding the following after paragraph (c):

(2) Subsection 18(3) of the Regulations is repealed.

7 (1) Paragraphs 19(1)(b) and (c) of the Regulations are replaced by the following:

(2) Subsection 19(3) of the Regulations is repealed.

8 Section 26 of the Regulations is replaced by the following:

26 Subject to section 28, no motor carrier shall request, require or allow a driver who is following cycle 1 to drive, and no driver who is following cycle 1 shall drive, after the driver has accumulated 70 hours of on-duty time during any period of 7 days.

9 Paragraph 27(a) of the Regulations is replaced by the following:

10 Sections 37 and 38 of the Regulations are replaced by the following:

37 Sections 39 to 54 apply in respect of driving north of latitude 60°N.

11 Section 40 of the Regulations and the heading before it are repealed.

12 (1) The portion of subsection 41(1) of the Regulations before paragraph (a) is replaced by the following:

41 (1) A driver who is driving a commercial vehicle fitted with a sleeper berth may meet the mandatory off-duty time requirements of section 39 by accumulating off-duty time in no more than 2 periods if

(2) Paragraph 41(1)(a) of the French version of the Regulations is replaced by the following:

(3) Subsection 41(1) of the Regulations is amended by adding the following after paragraph (c):

(4) Subsection 41(3) of the Regulations is repealed.

13 (1) The portion of subsection 42(1) of the Regulations before paragraph (a) is replaced by the following:

42 (1) A team of drivers driving a commercial vehicle fitted with a sleeper berth may meet the mandatory off-duty time requirements of section 39 by accumulating off-duty time in no more than 2 periods if

(2) Paragraphs 42(1)(b) and (c) of the Regulations are replaced by the following:

(3) Subsection 42(3) of the Regulations is repealed.

14 Subsections 61(1) and (2) of the Regulations are replaced by the following:

61 (1) The federal director may issue a special permit to a motor carrier for the purpose of a research or pilot project if the safety and health of the public, the driver or the employees of the motor carrier are unlikely to be jeopardized.

(2) Sections 12 to 54 and 76 to 99 do not apply in respect of special permits.

15 (1) Paragraph 62(1)(a) of the Regulations is replaced by the following:

(2) Paragraph 62(2)(a) of the Regulations is replaced by the following:

16 (1) Paragraph 63(1)(b) of the Regulations is replaced by the following:

(2) The portion of subsection 63(2) of the French version of the Regulations before paragraph (a) is replaced by the following:

(2) Les articles 24 à 29 et 49 à 54 ne s’appliquent pas au permis visant les véhicules de service de puits de pétrole; cependant, le permis doit exiger que le conducteur prenne :

(3) Paragraph 63(2)(b) of the French version of the Regulations is replaced by the following:

(4) Paragraph 63(4)(b) of the Regulations is replaced by the following:

17 (1) Paragraph 64(1)(b) of the Regulations is replaced by the following:

(2) Paragraph 64(1)(d) of the Regulations is replaced by the following:

(3) Subsection 64(1) of the Regulations is amended by striking out “and” at the end of paragraph (l), by adding “and” at the end of paragraph (k) and by repealing paragraph (m).

(4) Subsection 64(2) of the English version of the Regulations is replaced by the following:

(2) If requested by the director to do so, the motor carrier shall make available to the director the daily logs, supporting documents or records of on-duty times, for the 6 months before the date of the application, of every driver who will drive a commercial vehicle of the motor carrier under the permit.

18 The Regulations are amended by adding the following after section 64:

64.1 The director may, at any time after the application has been made, require an applicant to provide additional information in order for the director to evaluate whether the granting of a permit would be likely to jeopardize the safety or health of the public, the driver or the employees of the motor carrier.

19 Paragraph 65(2)(b) of the Regulations is replaced by the following:

20 Section 66 of the Regulations is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

21 (1) Paragraphs 67(1)(a) to (c) of the Regulations are replaced by the following:

(2) Paragraph 67(1)(c) of the Regulations is replaced by the following:

(3) Subsection 67(2) of the Regulations is repealed.

22 (1) Paragraph 68(1)(a) of the English version of the Regulations is replaced by the following:

(2) Paragraph 68(1)(b) of the Regulations is replaced by the following:

(3) Subsection 68(2) of the Regulations is repealed.

23 (1) The portion of subsection 76(2) of the Regulations before paragraph (a) is replaced by the following:

(2) A driver who encounters adverse driving conditions while driving the vehicle during a trip south of latitude 60°N may extend the permitted 13 hours of driving time specified in sections 12 and 13 and reduce the 2 hours of daily off-duty time required by subsection 14(3) by the amount of time needed to complete the trip if

(2) Paragraph 76(2)(a) of the English version of the Regulations is replaced by the following:

(3) Paragraph 76(2)(b) of the French version of the Regulations is replaced by the following:

(4) The portion of subsection 76(3) of the Regulations before paragraph (a) is replaced by the following:

(3) A driver who encounters adverse driving conditions while driving the vehicle during a trip north of latitude 60°N may extend the permitted 15 hours of driving time specified in section 39 by the amount of time needed to complete the trip if

(5) Subsection 76(4) of the Regulations is replaced by the following:

(4) A driver who extends their driving, on-duty or elapsed time because of an emergency or adverse driving conditions shall record the reason for doing so in the record of duty status.

24 The Regulations are amended by adding the following after section 76:

ELD Records of Duty Status

Electronic Logging Device

77 (1) A motor carrier shall ensure that each commercial vehicle that it operates is equipped with an ELD that meets the requirements of the Technical Standard, and shall ensure that it is mounted in a fixed position during the operation of the commercial vehicle and is visible to the driver when the driver is in the normal driving position, with the exception of commercial vehicles that are

(2) The motor carrier shall require the driver to record, and the driver shall record for each day, in accordance with these Regulations and the Technical Standard, all the information associated with their record of duty status as their duty status changes.

(3) Subsections (1) and (2) do not apply if

(4) If a motor carrier authorizes a driver to operate a commercial vehicle for yard moves within a terminal, depot or port and that is not on a public road, the motor carrier shall ensure that the driver’s ELD has been configured so that the driver can indicate those moves.

(5) A driver shall manually input or verify the following information in the ELD:

(6) No motor carrier shall request, require or allow a driver to use, and no driver shall use, more than one ELD at the same time for the same period.

(7) The motor carrier shall ensure that each commercial vehicle that it operates carries an ELD information packet containing a current version of the following documents:

(8) The motor carrier shall ensure that the driver records the information related to their record of duty status and the driver is required to record that information in a complete and accurate manner.

Malfunction

78 (1) A motor carrier shall ensure that any ELD that is installed or used in a commercial vehicle that it operates is in good working order and is calibrated and maintained in accordance with the manufacturer’s or seller’s specifications.

(2) If a driver of a commercial vehicle becomes aware of the fact that the ELD is displaying a malfunction or data diagnostic code set out in Table 4 of Schedule 2 of the Technical Standard, the driver shall notify the motor carrier that is operating the commercial vehicle as soon as the vehicle is parked.

(3) The driver shall record, in the record of duty status on the day on which he or she noticed the malfunction or data diagnostic code, the following information:

(4) The driver shall record the code referred to in paragraph (3)(a) in each record of duty status following the day on which the code was noticed, until the ELD is repaired or replaced.

(5) A motor carrier shall, within 14 days after the day on which it was notified of an ELD malfunction or data diagnostic code by the driver or otherwise became aware of it, or at the latest, upon return of the driver to the home terminal from a planned trip if that return exceeds the 14-day period, repair or replace the ELD.

(6) The motor carrier shall maintain a register of ELD malfunction or data diagnostic codes for ELDs installed or used in commercial vehicles that it operates for which a malfunction was noticed, and that register shall contain the following information:

(7) The motor carrier shall retain the information set out in subsection (6) for each ELD for which a malfunction was noticed for a period of 6 months from the day on which the ELD is replaced or repaired.

Accounts

78.1 A motor carrier shall create and maintain a system of accounts for ELDs that is in compliance with the Technical Standard and that

Certification of Record of Duty Status

78.2 A driver shall, immediately after recording the last entry for a day, certify the accuracy of their record of duty status.

Verification of Records of Duty Status

78.3 (1) A motor carrier shall verify the accuracy of the certified records of duty status that are forwarded by the driver according to the supporting documents provided and shall require from the driver those changes necessary to ensure the accuracy of the records.

(2) The driver shall either accept or reject the changes required by the motor carrier, make the necessary changes and recertify the accuracy of their record of duty status and forward the amended records of duty status to the motor carrier.

25 The reference “[77 to 79 Reserved]” after section 76 of the Regulations is replaced by the following:

[77 to 78 reserved]

Accreditation of ELD Certification Bodies

79 Any person or body that wishes to be accredited as a certification body for the purpose of certifying an ELD model as meeting the requirements set out in the Technical Standard and these Regulations must apply for the accreditation, in writing, to the Minister and must undergo an assessment to verify

79.1 (1) If the Minister is satisfied that the applicant meets the requirements of paragraphs 79(a) to (c), he or she must accredit the applicant, provide them with an accreditation number and notify them in writing of the period of validity referred to in subsection (2).

(2) The accreditation of a certification body is valid for five years beginning on the day on which the Minister accredits the applicant.

79.2 (1) An accredited certification body must assign a certification number to every ELD model that meets the requirements set out in the Technical Standard and these Regulations.

(2) An accredited certification body must, within seven days after certifying an ELD model, provide the Minister with the following information about that ELD model:

79.3 (1) Subject to subsection (2), the Minister must suspend the accreditation of a certification body if it does not meet any of the requirements of paragraphs 79(a) to (c) or of section 79.2.

(2) The Minister must not suspend an accreditation unless the certification body

(3) The Minister may grant an extension of the period in which corrective actions must be taken only once.

(4) The Minister must notify the certification body in writing of the suspension and the date on which it takes effect.

(5) The certification body must provide the Minister, within 15 days after the day on which the suspension takes effect, with a list of pending applications for certification.

(6) The suspension of an accreditation must be lifted if the Minister determines that corrective actions have been taken.

79.4 (1) The Minister must cancel an accreditation if the certification body

(2) The Minister must not cancel an accreditation unless the certification body was notified in writing of the grounds for the cancellation and was provided with an opportunity to be heard in respect of the cancellation.

(3) The Minister must notify the certification body in writing of the cancellation and the date on which it takes effect.

26 The heading “Daily Logs” before section 80 of the Regulations is replaced by the following:

Other Records of Duty Status

27 (1) Subsection 81(1) of the Regulations is replaced by the following:

81 (1) A motor carrier shall require every driver to fill out, and every driver shall fill out a record of duty status each day that accounts for all of the driver’s on-duty time and off-duty time for that day if

(2) Paragraph 81(2)(a) of the English version of the Regulations is replaced by the following:

(3) Paragraphs 81(2)(c) and (d) of the Regulations are replaced by the following:

28 (1) The portion of subsection 82(1) of the Regulations before paragraph (a) is replaced by the following:

82 (1) At the beginning of each day, a motor carrier shall require that a driver enters legibly, and the driver shall enter legibly, the following information in a daily log, using the grid in the form as set out in Schedule 2:

(2) Paragraph 82(1)(b) of the Regulations is replaced by the following:

(3) Paragraphs 82(1)(d) to (f) of the Regulations are replaced by the following:

(4) Paragraphs 82(1)(f) and (g) of the Regulations are replaced by the following:

(5) Subsections 82(2) and (3) of the Regulations are replaced by the following:

(2) The motor carrier shall require that the driver records, and the driver shall record, in the daily log, using the grid set out in Schedule 2, the following information as it becomes known:

(3) For greater certainty, nothing in subsection (2) prevents the driver from changing the hours at the top of the grid in order to reflect a different start time.

(4) The driver shall record in the daily log, as this information becomes known, the names and addresses of any other motor carriers by which they have been employed or otherwise engaged during the day.

(5) If a driver is engaged in making deliveries in a municipality that results in a number of periods of driving time being interrupted by a number of short periods of other on-duty time, the periods of driving time may be combined and the periods of other on-duty time may be combined on the grid.

(6) A motor carrier shall require that the driver records at the end of each day, and the driver shall record at the end of each day, on the grid, the total hours for each duty status and the total distance driven by the driver that day, excluding the distance driven in respect of the driver’s personal use of the vehicle, as well as the odometer reading at the end of the day and the driver shall sign the daily log certifying the accuracy of the information recorded in it.

29 Section 83 of the Regulations and the heading before it are repealed.

30 The Regulations are amended by adding the following before the heading before section 84:

Possession, Distribution and Keeping of Records of Duty Status

31 (1) Paragraph 84(a) of the English version of the Regulations is replaced by the following:

(2) Paragraph 84(c) of the Regulations is replaced by the following:

32 Section 85 of the Regulations is replaced by the following:

85 (1) A driver shall, within 20 days after completing a record of duty status, forward the record of duty status and supporting documents relating to that record to the home terminal and the motor carrier shall ensure that the driver does so.

(2) A driver who is employed or otherwise engaged by more than one motor carrier in any day shall forward, within 20 days after completing a paper record of duty status, and the motor carriers shall ensure that the driver forwards, the original record of duty status to the home terminal of the last motor carrier for which the driver worked and a copy of it to the home terminal of each other carrier for which the driver worked, as well as the supporting documents relating to that record to the home terminal of the carrier for which the driver worked during the periods referred to in those supporting documents.

(3) The motor carrier shall

33 The heading before section 86 of the Regulations is replaced by the following:

Tampering

34 Subsection 86(2) of the Regulations is replaced by the following:

(2) No motor carrier shall request, require or allow any person to enter, and no person shall enter, inaccurate information in a record of duty status or falsify, mutilate, obscure, alter, delete, destroy or deface the records or supporting documents.

(3) No motor carrier shall request, require or allow any person to, and no person shall, disable, deactivate, disengage, jam or otherwise block or degrade a signal transmission or reception, or re-engineer, reprogram or otherwise tamper with an ELD so that the device does not accurately record and retain the data that is required to be recorded and retained.

35 The heading before section 87 of the Regulations is replaced by the following:

Monitoring by Motor Carriers

36 Subsection 87(2) of the Regulations is replaced by the following:

(2) A motor carrier that determines that there has been non-compliance with these Regulations shall take immediate remedial action and record the dates on which the non-compliance occurred and the action taken.

37 (1) Paragraphs 91(1)(a) to (c) of the Regulations are replaced by the following:

(2) Paragraph 91(1)(d) of the Regulations is replaced by the following:

(3) Paragraph 91(1)(e) of the Regulations is replaced by the following:

(4) Subsection 91(1) of the Regulations is amended by striking out “or” at the end of paragraph (d), by adding “or” at the end of paragraph (e) and by adding the following after paragraph (e):

(5) Paragraphs 91(3)(a) to (d) of the Regulations are replaced by the following:

(6) Subsection 91(4) of the Regulations is replaced by the following:

(4) The out-of-service declaration in respect of a driver who contravenes section 86 continues to apply beyond the 72 hours until the driver rectifies the daily log, if applicable, and provides it to the director or inspector so that the director or inspector is able to determine whether the driver has complied with these Regulations.

38 Section 97 of the Regulations and the heading before it are replaced by the following:

Authority to Stop and Enter for Inspections

97 (1) An inspector may, during business hours, enter a motor carrier’s home terminal or principal place of business, other than living quarters, for the purpose of verifying compliance with the requirements of these Regulations.

(2) An inspector may, at any time, enter a commercial vehicle, or stop and enter it, for the purpose of verifying compliance with the requirements of these Regulations.

(3) An inspector may, at any time, enter a sleeper berth, or stop a commercial vehicle and enter its sleeper berth, for the purpose of verifying that the sleeper berth meets the requirements of Schedule 1.

Obstruction

97.1 No person shall obstruct or hinder, or knowingly make any false or misleading statements either orally or in writing to an inspector who is engaged in carrying out their duties and functions under these Regulations.

39 The heading before section 98 and sections 98 and 99 of the Regulations are replaced by the following:

Production of Records of Duty Status and Supporting Documents

98 (1) At the request of an inspector, a driver shall produce for inspection records of duty status for the current day and the preceding 14 days, the supporting documents for the current trip — in their existing format — as well as any permit under which the driver may be driving.

(2) If the records requested by the inspector are in electronic format, the driver shall produce either the display or a printout of the records and, if requested by the inspector to transmit the records of duty status, shall transmit them by the transfer method identified by the inspector that is provided for in the Technical Standard and is supported by the ELD.

(3) The driver shall, at the request of an inspector, give the inspector a copy of the paper records of duty status and supporting documents for the current day and the preceding 14 days, or the originals if it is not possible in the circumstances to make copies, as well as any permit under which the driver may be driving.

(4) The inspector shall provide the driver with a receipt in the form set out in Schedule 3 for the paper records of duty status and supporting documents received.

99 (1) A motor carrier shall, during business hours, at the request of an inspector, produce the following documents for inspection at the place specified by the inspector:

(2) The motor carrier shall transmit to the inspector the electronic records of duty status in the format, and using one of the transfer methods, prescribed in the Technical Standard.

(3) The inspector shall

40 Schedule 1 to the Regulations is amended by replacing the references after the heading “SCHEDULE 1” with the following:

(Paragraphs 18(1)(c.1), 19(1)(c), 41(1)(c.1) and 42(1)(c) and subsection 97(3))

41 Item 1(g) of the French version of Schedule 1 to the Regulations is replaced by the following:

42 Items 1(j) to (l) of Schedule 1 to the Regulations is replaced by the following:

43 Schedules 2 and 3 to the Regulations are replaced by the Schedules 2 and 3 set out in the schedule to the Regulations.

44 The Regulations are amended by replacing “daily log” and “daily logs” with “record of duty status” and “records of duty status”, respectively, in the following provisions:

Coming into Force

45 (1) Subject to subsection (2), these Regulations come into force on the day on which they are published in the Canada Gazette, Part II.

(2) Subsections 1(2), (4) and (11), section 5, subsections 16(4), 21(2) and 23(5), sections 24 and 26, subsections 27(1) and 28(4), sections 29, 30 and 32 to 35, subsections 37(2) and (4) and sections 39, 43 and 44 come into force on the second anniversary of the day on which these Regulations are published in the Canada Gazette, Part II.

SCHEDULE

(Section 34)

SCHEDULE 2

(Subsections 82(1) and (2))

Duty Status Grid

Detailed information can be found in the surrounding text.

SCHEDULE 3

(Subsection 98(4) and paragraph 99(3)(a))

Receipt

It is acknowledged that, pursuant to subsection 98(4) or paragraph 99(3)(a) of the Commercial Vehicle Drivers Hours of Service Regulations, the following records of duty status and supporting documents were provided by

(Name of person / Nom de la personne)

at / à

(Number, street, municipality, location, province of motor carrier / Numéro, rue, municipalité, endroit, province du transporteur routier)

on / le

(Day, month, year / Jour, mois, année)

namely / à savoir

(Description of records of duty status and supporting documents received /
Description des rapports d’activités et des documents justificatifs reçus
)

Dated at / Fait à

(Municipality, location / Municipalité, endroit)

on / le

(Day, month, year / Jour, mois, année)

Inspector’s signature / Signature de l’inspecteur

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: The Commercial Vehicle Drivers Hours of Service Regulations (the Regulations) require drivers of commercial buses and trucks to self-report their on-duty time, off-duty time and driving time either in a paper daily log or an electronic recording device (ERD). An ERD is a first-generation device that is subject to few technical specifications. The information generated from these daily logs can be falsified, incomplete, duplicated or missing altogether in an effort to avoid accountability for non-compliance with the Regulations. It can therefore be difficult and frequently impossible for roadside enforcement or the motor carrier to detect non-compliance by the driver simply by viewing the daily logs. Non-compliance with hours of service (HOS) requirements by a motor carrier or driver can result in driver fatigue, which can significantly increase crash risk. An employee that drives or works in excess of the HOS limits can provide the non-compliant operator with a competitive advantage over those motor carriers that comply with the Regulations.

Description: The amendments will, in alignment with the U.S. requirements, mandate the use of electronic logging devices (ELDs) footnote 2 by drivers who are currently maintaining a daily log and establish more specific requirements for supporting documents (e.g. bills of lading) that must be kept by the driver and motor carrier. The amendments will also incorporate by reference a technical standard to establish minimum performance and design specifications for ELDs. All ELDs will need to be certified by an accredited third party in accordance with the criteria set out in the technical standard and the Regulations. There will be a 24-month implementation period. During this period, the ELDs will be tested and certified and motor carriers will need to select, acquire and install ELDs in their commercial vehicles for drivers to begin using them. Other incidental amendments also improve conformity with legal drafting standards and harmonize the Regulations with updates that have been made to the National Safety Code for Motor Carriers Standard #9 — Hours of Service.

Cost-benefit statement: The amendments will yield safety benefits by reducing crashes (less property damage and fewer injuries and fatalities); reduced out-of-service detention time of drivers for HOS violations; time savings to both the motor carrier industry (administrative costs saved) and provincial and territorial governments (quicker, more efficient and effective inspections and facility audits); and paper daily log savings for motor carriers. The total benefits are estimated to have a present value of $380.33 million, with an annualized value of $54.15 million. In addition, non-quantified benefits would include fairer and more level competition for federally regulated motor carriers; greater harmonization with U.S. regulatory requirements; improved compliance with HOS rules; and an improved quality of life for drivers (increased opportunity for recuperative rest).

The amendments will result in additional costs for federally regulated truck and bus motor carriers and for the provincial and territorial governments. These costs will include those incurred by the motor carrier for the acquisition, installation, activation and the monthly monitoring service of ELDs; training costs for motor carrier drivers and for provincial/territorial inspectors and auditors; and other costs associated with moving closer to full compliance with the amendments. Total costs are estimated to have a present value of $299.19 million, with an annualized value of $42.60 million. Therefore, the present value of the net benefits of the amendments is estimated at $81.15 million, with an annualized value of $11.55 million.

“One-for-One” Rule and small business lens: The amendments will result in a reduction in annual administrative costs of $27.30 million ($2,832 per business).

The amendments will impact small businesses and the small business lens applies. However, the net impact for small businesses will be positive, as the cost of compliance will be more than offset by administrative cost savings.

Domestic and international coordination and cooperation: The amendments are aligned with similar requirements in the United States (U.S.), delivering administrative cost savings, as well as safety and competitive benefits, without introducing any impediments to trade.

Background

The Government of Canada is committed to a transportation system that is safe and reliable and that facilitates trade and the movement of people and goods. The National Transportation Policy calls for a competitive national transportation system that meets the highest practicable safety and security standards. Transport Canada (TC) is therefore committed to facilitating fair competition within and between modes of transportation throughout Canada.

Road safety in Canada is a shared responsibility between the federal, provincial and territorial governments. The federal government is responsible for establishing the safety fitness framework for the safe operations of international and interprovincial truck and bus undertakings (motor carriers), which includes the HOS rules for commercial drivers. The provinces and territories are responsible for the oversight of motor carriers that operate within their respective jurisdictions. The provinces and territories are also responsible for enforcing their own regulations as well as the federal regulations.

Driver fatigue is recognized in Canada and internationally as a critical risk factor associated with motor vehicle crashes. Fatigue in commercial drivers is especially important given that large trucks and buses involved in crashes can cause more severe injuries and more frequent fatalities than private passenger vehicle crashes. To mitigate the risk of fatigue, the federal, provincial and territorial governments have HOS regulations in place that limit a driver’s on-duty and driving time and require minimum periods of rest or off-duty time in order to reduce fatigue-related crashes, injuries and fatalities.

The Regulations previously required commercial drivers to self-report, in a prescribed format, their driving, on-duty and off-duty times in a paper daily log or ERD, which is reviewed by provincial and territorial roadside inspectors and facility auditors for compliance with the Regulations. Transport Canada estimates that there are 193 583 federally regulated commercial motor vehicles (CMVs) based in Canada. Of this total, the drivers of an estimated 157 424 CMVs were required by the Regulations to maintain a paper daily log because they operate their CMV outside of a 160-km radius of their home terminal (see Table 1).

As an alternative to using a paper daily log, the Regulations also permitted drivers to use an ERD, which is an electric, electronic or telematics device that is installed in a commercial vehicle and used to record their daily log electronically. There are few additional technical specifications that apply to these first-generation devices beyond those required for the paper daily log. Given that there are so few technical specifications for ERDs, the marketplace largely determines the features of these devices, resulting in a significant variation in their capabilities, ranging from devices that are very sophisticated to others that are as simple as a laptop loaded with a modified spreadsheet program. In many cases, the ERD is already a component of a comprehensive fleet management system (FMS). Transport Canada estimates that there are 42 875 trucks equipped with an FMS that has an ERD component and, of these, 24 010 have been voluntarily activated by the motor carrier to realize the benefits of using technology to track the driver’s HOS rather than a paper daily log. Additionally, it is estimated that ERDs were voluntarily installed on 308 buses.

The U.S. federal government has HOS rules comparable to those in Canada. On December 16, 2015, the U.S. Federal Motor Carrier Safety Administration (FMCSA), an agency of the Department of Transportation, published a final rule mandating the use of ELDs by motor carriers and drivers in order to monitor and track compliance with the federal HOS rules. An ELD is a device integrated into a commercial vehicle’s on-board electronic systems that allows for the automatic recording of driving time, which accounts for most on-duty time. This new device is referred to as an “ELD” in both the U.S. and Canada so as to differentiate the updated technology from the first-generation ERDs. As of December 18, 2017, the U.S. requires all motor carriers, including the Canadian motor carriers, which operate an estimated 85 749 CMVs in the U.S., to acquire, install and use the new ELDs. The U.S. final rule also includes extensive technical specifications for the devices.

Table 1: Federally regulated CMVs affected by the amendments and ELD/ERD usage
Commercial Motor Vehicles (CMVs) Number of Affected Trucks Number of Affected Buses Total
Canada-based CMVs that operate into the U.S. 85 749 2 100 87 849
Canada-based CMVs travel within Canada Activated ERD 24 010 308 24 318
Non-activated ERD 18 865 0 18 865
No hardware 24 500 1 892 26 392
Total federally regulated CMVs requiring daily log 153 124 4 300 157 424

Issues

Fatigue and collision risk

Provincial and territorial law enforcement officials have found that daily logs can be falsified or incomplete and in some cases they are duplicated or missing altogether in an effort to avoid accountability for non-compliance with the Regulations. This can make it difficult and frequently impossible for roadside enforcement to detect the occurrence of non-compliance with HOS requirements. Despite these difficulties, the provincial and territorial governments recorded an average of 9 400 convictions per year for HOS violations between 2010 and 2015.

Approximately 25% of these HOS convictions are for exceeding the maximum hours prescribed by the Regulations. Another 11% are convictions for operating two daily logs at the same time or for falsifying the information in the daily log. Approximately 48% of the HOS convictions are for failing to maintain or failing to produce a daily log, which is widely recognized by law enforcement (and acknowledged by industry) as a strong indicator that the driver may have been exceeding the maximum hours and chooses to submit no daily log for inspection rather than submit one that would show non-compliance.

In interviews with truck drivers, the U.S.-based Insurance Institute for Highway Safety (IIHS) found that a quarter of interviewed drivers admitted to omitting hours worked in the daily log; driving more than the daily limit; taking less than the required daily off-duty time; and working longer than permitted during the past month. Although Canada-specific data is limited, Transport Canada estimates, after consulting with industry, that 5% to 10% of drivers routinely exceed allowable HOS limits, which can result in fatigue. There is an international consensus that fatigue is associated with 15% to 20% of crashes in transportation. In their survey, the IIHS found that drivers with daily log violations, compared to those with no violations at all, were 2.3 times more likely to have a large truck crash.

Unfair competition

Motor carriers and drivers who operate in excess of the HOS limits may also have a competitive advantage over those that do not, due to the increased productivity obtained through the additional operational hours. As these drivers are able to work more hours, they may be paid more than those who are following the rules. As a result, non-compliance with the Regulations may be used as a tactic to recruit and retain drivers at a time when the industry is dealing with a driver shortage.

Legal drafting standards

The Standing Joint Committee for the Scrutiny of Regulations (SJCSR) reviewed the Regulations in 2015 as well as the proposed amendments published in the Canada Gazette, Part I, and found that certain provisions in the proposed amendments did not adhere to regulatory drafting standards due to superfluous, incorrect or redundant wording. The SJCSR found examples of divergences between the French and English versions of the Regulations and a few sections where wording needed improvement in order to make the regulatory requirements clear and unambiguous for motor carriers and drivers.

Harmonization with the National Safety Code for Motor Carriers

Finally, the National Safety Code for Motor Carriers underwent an amendment in April 2010 to its Standard #9 —Hours of Service, which is the standard used by the federal, provincial and territorial governments to promote harmonization in the drafting of their respective HOS regulations. These amendments are being updated to incorporate the changes to Standard #9.

Objectives

The objectives of the amendments are to improve commercial vehicle safety, administrative efficiency and compliance with HOS regulations. In addition, the amendments serve to facilitate fairer competition by requiring the use of ELDs by motor carriers and their commercial bus and truck drivers. The new ELD requirements are aligned, to the extent possible, with those of the U.S. in order to facilitate trade and minimize the impact on Canada’s cross-border operators. These amendments also address issues raised by the SJCSR and reflect amendments that have been made to the National Safety Code for Motor Carriers Standard #9 — Hours of Service.

Description

Subject to a few exceptions listed below, the amendments require that ELDs be used by all federally regulated motor carriers and their drivers of commercial buses and trucks, who are currently required to maintain a paper daily log. The Regulations incorporate by reference the Technical Standard for Electronic Logging Devices (the Technical Standard) published by the Canadian Council of Motor Transport Administrators (CCMTA) on April 11, 2019, and as amended from time to time. The standard establishes minimum performance and design specifications for the ELD that are based on U.S. technical requirements, but adapted to accommodate the Canadian HOS regulations. Transport Canada will require that each ELD model be certified for use by the motor carrier. To obtain certification, the ELD model will need to be certified by an accredited certification body. This will ensure that the ELD meets the criteria set out in the Technical Standard and the Regulations. Motor carriers and drivers will also be required to use only ELD models and software versions that have been certified as compliant.

Exemptions: There are four main exemptions to this mandatory requirement to use an ELD:

Drivers operating under either a permit or a statutory exemption will be exempt from having to use an ELD, as the terms and conditions of a permit or an exemption can be complex, temporary in nature, and can vary significantly depending on the circumstances. Consequently, the parameters of permits or exemptions would be impractical to program into an ELD in a timely and cost-efficient manner. Short-term rentals under 30 days duration will also be exempt as it would be costly and impractical for motor carriers to install compliant devices in vehicles that are only under their control for a short period of time. The final exemption pertains to commercial vehicles or engines that were built before model year 2000. As most of these vehicles are equipped with mechanically controlled engines rather than electronic control modules, they are incompatible with the functions of an ELD to record data such as speed, engine-on, or odometer readings. Drivers of these exempted vehicles will continue to be required to maintain a paper daily log to track their driving and on-duty hours.

Use of ELDs to record duty status: The amendments require motor carriers to acquire and install certified ELDs in their commercial vehicles that their drivers operate outside of a 160-km radius of their home terminal. Drivers will be required to enter into the ELD some of the information associated with their record of duty status (e.g. on-duty time associated with fuelling, loading or unloading the commercial vehicle) and the ELD will automatically record the remaining information such as driving time, odometer readings, and engine power-up, in accordance with the Regulations and the Technical Standard. Other provisions require the motor carrier to create distinct accounts for each driver within the ELD’s operating system so that their hours can be tracked independently. At the end of a day, drivers will be required to certify the accuracy of their record of duty status and the motor carrier will have to verify and retain those records.

Certification of ELDs for compliance with specifications: The amendments require motor carriers and drivers to only use ELDs that have been certified for use by an accredited certification body, as compliant with the Technical Standard and the Regulations. The amendments include provisions for interested certifying bodies that make application for accreditation to Transport Canada and undergo an assessment of their capability to certify ELD models for compliance.

ELD providers that want to offer certified devices for motor carriers to use are expected to submit their devices to a certification body that will test the devices for compliance. When a device is found to be compliant, the ELD provider will be assigned a certification number by the certifying body, which will form part of the ELD record in each installed device to provide assurance to motor carriers and roadside enforcement that the device has been certified. The process to accredit certifying bodies and certify the ELD models is expected to take 12 months.

A list of ELD providers and their certified devices will be maintained on Transport Canada’s website, which can be used to confirm certification. The amendments also have provisions to allow Transport Canada to suspend or cancel the accreditation of a certification body.

Supporting documents: The amendments include a description of what constitutes a supporting document and requires drivers to forward all supporting documents to the relevant motor carriers. The supporting document provisions reflect the types of documents currently received by the driver or motor carrier in the normal course of their operations, and those that are retained by the motor carrier for other business or tax purposes, such as expense receipts, bills of lading and payroll records. The amendments also include additional documents that have been issued by the federal or provincial/territorial governments, such as customs receipts, citations and collision or inspection reports.

Malfunctions of ELD: The amendments allow for a driver to use a paper daily log if their ELD has a malfunction, as described in the Technical Standard. The driver may use the paper daily logs for a maximum of 14 days or upon return to the home terminal from the currently planned trip, if the trip takes longer than 14 days. After this period, the ELD must be repaired or replaced and fully functional before the commercial motor vehicle and its ELD are dispatched on another trip. Drivers are required to notify the motor carrier when a malfunction occurs. Upon notification, the motor carrier is required to maintain a register of the malfunction, detailing prescribed information such as when it occurred, the nature of the malfunction and the actions taken by the motor carrier to repair or replace the ELD. Motor carriers are required to maintain this register for a period of six months from the day on which the ELD is repaired or replaced, and this register is subject to audit by provincial or territorial facility auditors.

Transmission of ELD records to roadside enforcement: The tool that was previously referred to as a “daily log” will now be called a “record of duty status.” The driver’s record of duty status will be available to roadside enforcement through a display or printout from the ELD. Upon request by an inspector, the ELD record will be emailed to an address provided by the inspector. The local transfer of the ELD record by USB 2.0 or Bluetooth is also a transfer option, but will not be a mandatory function required for the ELD.

Transmission of records of duty status and supporting documents to the motor carrier: The amendments harmonize the requirement for the driver to forward to the motor carrier their paper daily logs or ELD records, and their corresponding supporting documents. Records of duty status and supporting documents will be required to be forwarded by the driver to a location designated by the motor carrier within 20 days after completing a record of duty status. The motor carrier will be required to deposit these records at its principal place of business within 30 days after first receiving them. This timeline aligns with the current rules established with respect to the transmission of paper daily logs.

Other incidental amendments: Other incidental amendments improve the Regulations’ conformity with legal drafting standards and respond to comments raised by the SJCSR. A number of other amendments will harmonize the Regulations with updates that have been made to the National Safety Code Standard #9 — Hours of Service in April 2010. The definitions of “commercial vehicle” and “on-duty time” have been amended to clarify their intent. The personal use provisions have been relocated within the Regulations to ensure that they are treated as an exception to “on-duty time,” which is the original intent of the provisions. There were also some changes made to the section references associated with out-of-service (OOS) declarations in section 91.

Regulatory and non-regulatory options considered

Transport Canada considered a number of options for achieving the objectives identified above (i.e. improved safety, administrative efficiency and HOS compliance, and the facilitation of fair competition), including voluntary adoption of ELDs and regulatory amendments with different phase-in periods. The costs of different phase-in periods will be discussed in the “Sensitivity analysis” section below.

Voluntary adoption

Voluntary adoption is essentially the baseline or status quo approach. While some motor carriers are voluntarily installing ERDs, the adoption rate appears to be slowing. The motor carriers who have yet to adopt ERDs include those that are most resistant to using ELDs and those who are finding it difficult to comply with the prescribed HOS limits in the Regulations. A regulatory approach is necessary to achieve a 100% usage rate, among those not exempted from having to use an ELD, to fully realize the competitive, safety and monetary benefits of using ELDs.

Regulatory

In a regulatory scenario, ELD providers are expected to take approximately 12 months after publication of the amendments in the Canada Gazette, Part II, before the first certified ELD devices are available for motor carriers to acquire. Once the certification process is completed, motor carriers will have another 12 months or more to meet the compliance and enforcement requirements with the installation and activation of ELDs. The combined certification and implementation period is 24 months.

A significant portion of the federally regulated CMV fleet that requires daily logs is engaged in cross-border operations (57% for trucks and 49% for buses) and are already obligated to use a U.S.-compliant device. A portion of the CMVs that travel within Canada are already equipped with ERDs (28% for trucks and 72% for buses). According to the ELD providers that were consulted, existing U.S.-compliant ELDs and ERDs would not require replacement in order to be compliant with these amendments. The U.S.-compliant units and the ERDs will receive a software upgrade that, in most cases, can be deployed remotely to the devices through over-the-air software.

The CMVs that do not have electronic devices, and are using paper logs, must migrate to ELD-compliant technology. This category represents approximately 16% of federally regulated trucks, and 44% of federally regulated buses, whose drivers are currently required to maintain daily logs.

Twelve-month phase-in

A 12-month implementation phase-in was considered. A shorter implementation period would allow for a quicker accrual of the substantial benefits of using ELDs. However these amendments introduce an ELD certification process. This certification process could add up to a year to the implementation phase-in period, which would not allow any time for motor carriers to become fully compliant before the end of the phase-in period.

Eighteen-month phase-in

An 18-month phase-in period was considered but after the completion of the certification process, it would provide the motor carrier with approximately 6 months to become fully compliant and that would not allow sufficient time before the end of the phase-in period. Transport Canada estimates that motor carriers will need up to 12 months for motor carriers to select, acquire and install ELDs and to have their drivers begin to use them.

Twenty-four–month phase-in

A 24-month phase-in period was chosen because it provides adequate preparation time for the certification of the ELDs and for motor carriers and drivers to become fully compliant. The certification process is expected to take up to 12 months to complete. Most CMVs already have U.S.-compliant ELDs or ERDs on board, so to become compliant, the devices would require a simple software upgrade that can be quickly deployed, in most cases remotely. A smaller portion of trucks and buses will require their motor carriers to arrange to select, acquire and purchase their ELDs and motor carriers are expected to have approximately 12 months or so to do that. This phase-in period aligns with the approach taken by the U.S., and would allow additional time for outreach to ensure that motor carriers, shippers and consignees are informed of the new requirements. Provincial and territorial governments would benefit from the additional time to train their inspectors and auditors, develop enforcement policies, and to consider adoption of their own ELD mandate for intra-provincial motor carriers.

Benefits and costs

In 2014, TC committed to undertake preparatory work to assess the potential impact of ELDs in anticipation of a U.S. final rule. TC sought provincial/territorial support to obtain their data to contribute towards a national cost-benefit analysis of mandatory ELD usage.

TC completed the first iteration of a cost-benefit analysis on this regulatory proposal in July 2015, which demonstrated that the proposed amendments would yield a two-to-one benefit to cost ratio. Where necessary, it drew from assumptions and data from the cost-benefit analysis of the U.S. FMCSA’s proposed rule-making. When the implementation timing of the final U.S. ELD rule was finalized (in December 2015), the cost-benefit analysis was updated to exclude U.S.-bound Canadian vehicles because they would adopt ELDs with or without the proposed amendments, given the need for compliance with the U.S. rule. Since the first iteration of cost-benefit analysis, the U.S. rule went into force and U.S.-bound Canadian vehicles have adopted U.S.-compliant ELDs. Under the Canadian regulatory scenario, those U.S.-bound Canadian vehicles would also have to comply with the Canadian rule and are therefore accounted in the cost-benefit analysis. The next section will explain how each different group of CMVs will be affected.

Baseline and regulatory scenarios

The cost-benefit analysis is conducted by comparing the differences between the regulatory and baseline scenarios. The baseline scenario reflects the current and probable future actions of the regulated community in the absence of the amendments. Transport Canada analyzed how different groups of CMVs will be affected by the requirements under both scenarios. Table 2 presents the incremental requirements and benefits due to the amendments per category of CMVs.

Table 2: Baseline and regulatory scenarios by group of CMVs

Commercial motor vehicles (CMV)

Baseline facts

Incremental costs

Incremental Benefits

     

Efficiency benefits

Safety benefits

Canada-based CMVs that operate in the U.S.

Compliant with the U.S. requirements

Increase in monitoring

No change

No change

Canada-based CMVs travelling within Canada

Activated ERD

Currently using ERD for daily logs but need software upgrading

Upgrading fee is negligible

Increase in monitoring

Small increase in efficiency due to standardized system

Small increase in safety due to standardized system

Non-activated ERD

Although they have ERD installed, they maintain paper logs

Activation

Monitoring

Switch from paper to ELD provides efficiency benefit

Reduction in HOS violations resulting in incremental safety benefit

No hardware

Maintain paper logs

Acquisition

Installation

Activation

Monitoring

Switch from paper to ELD provides efficiency benefit

Reduction in HOS violations resulting in incremental safety benefit

Incremental impacts for Canada-based CMVs that operate in the U.S.

Of the 157 424 affected CMVs, an estimated 87 849 CMVs operate in the U.S. and have been captured by the U.S. ELD rule. As a result, commercial vehicles travelling into the U.S. will require one ELD in order to be compliant in both countries. However, Canadian motor carriers that operate in the U.S. may have to pay additional monitoring fees to have a functional ELD during their operations in Canada. Efficiency or safety benefits from those CMVs are nil.

Incremental impacts for Canada-based CMVs that operate only domestically

Activated ERD

Motor carriers that only operate CMVs within Canada (the remaining 69 575 CMVs) will bear a greater cost and are the main focus of the amendments. Of these 69 575 CMVs, 43 183 have FMS technology. Although it is not required by the current Regulations, 24 318 CMVs within this category have ERDs that have been activated voluntarily, as a method to track the driver’s hours of work in lieu of a paper daily log. For these CMVs with an activated ERD, the amendments will impose additional monitoring costs. There are some efficiency and safety benefits from this category, but the magnitude of those benefits are unknown.

Non-activated ERD

For CMVs that have an FMS but the ERD is non-activated, carriers will have to incur activation costs, in addition to monitoring costs. The switch from paper to ELD will reduce the administrative burden for drivers, inspectors and auditors associated with the time spent filling out daily logs. ELDs will also help mitigate the effects of driver fatigue on road safety since a portion of drivers tend to operate above HOS limits. It is in this context that ELDs can increase compliance and potentially have a positive safety impact.

No hardware

Carriers that only operate CMVs within Canada and are not equipped with FMS or equivalent hardware and are still maintaining paper logs will have to purchase, install and activate an ELD, in addition to paying for the monitoring service. These amendments will have the same efficiency and safety benefits as for CMVs that have an FMS but the ERD is non-activated.

Data sources

Data availability presented significant challenges throughout the data collection phase of this project. There were no single or robust data sources to establish a baseline for the number of federally regulated commercial vehicles where drivers were required to maintain a daily log; estimate the percentage of U.S.-active commercial vehicles; or accurately estimate current ERD usage industry-wide. Time savings for drivers to fill out daily logs versus ELDs and accurate HOS OOS rates and detention times were also difficult to quantify. In light of this, data estimates and baselines were intentionally kept conservative to account for data integrity and quality issues. In instances where data was unavailable or unreliable, U.S. numbers, estimates and analytical methodologies from the U.S. FMCSA’s February 2014 Regulatory Impact Analysis were used and adapted to the Canadian context.

The process to collect required data to be used in this cost-benefit analysis was open and transparent. Data collection requests were sent to all provincial and territorial governments through CCMTA’s Compliance and Regulatory Affairs Program Committee. All major truck and bus associations within the regulated community were consulted and invited to submit data. Using the data collected, TC forecasts the expected number of CMVs to be affected by the amendments. TC also assumes that the trucking fleet will grow at an annual rate of 3.2%, which was the average growth rate of the number of registered trucks weighing more than 4 500 kg in Canada over the past 10 years. footnote 3, footnote 4 On the other hand, the size of the bus fleet is expected to be stable over the analysis period. Figure 1 shows the fleet of federally regulated CMVs required to maintain daily logs over the analysis period.

Figure 1: Federally regulated CMVs requiring daily logs (2019–2028)

Detailed information can be found in the surrounding text.

Analytical framework

For this analysis and following a Treasury Board Secretariat Guideline, a 7% discount rate was used with a 10-year period from 2019 to 2028, using 2018 constant values, which are considered reasonable for estimating the impacts of the amendments. A copy of the cost-benefit analysis report is available upon request.

Benefits

The benefits of the amendments would include: time savings to drivers from reduced time to fill out paper daily logs; time savings for carrier clerical staff as daily log information will be electronically transmitted; time savings for roadside inspectors and auditors as ELDs will allow them to more quickly and efficiently detect HOS violations at roadside and during compliance audits; paper logbook savings; reduced OOS detention time by reducing the propensity of drivers to be placed out of service from HOS violations; and safety benefits by reducing crashes involving commercial motor vehicles that may be attributable to driver fatigue or HOS violations.

The present value of these benefits will be approximately $380.33 million. Among the total benefits, savings to the industry including both motor carriers and drivers, account for the majority (99.9%) while the remaining benefits are the time savings related to roadside inspections and facility audits, as well as reduction in vehicle crashes. By aligning the requirements with the U.S. rule, the amendments will not negatively impact the cross-border movement of commercial vehicles (goods and passengers) between the two countries. Other qualitative benefits include meeting Canadians’ interest in safer roads and transportation in Canada as well as enhancing carriers’ capacity to move goods or passengers. In addition, the quality of life for motor carrier drivers could improve from the reduced number of extra working hours and fatigue incidents, which can result in lower levels of stress, improved personal and family life, and general improvement for health and well-being. Due to data limitations, these benefits were not quantified.

Time savings due to elimination of paper daily logs

ELDs can reduce the driver time that is currently needed to maintain a paper daily log. The department conducted a sensitivity analysis on the variables representing the time savings for drivers to fill out a record of duty status with ELDs versus paper daily logs (see Table 5). The time savings in the central scenario was four and a half minutes per record of duty status based on the U.S. FMCSA data, which was backed by extensive analysis and public input. The estimates result in a total present value of $229.26 million in cost savings. footnote 5

ELDs could also shorten the time needed by enforcement authorities to inspect the driver’s record of duty status and allow for the development of software that can quickly analyze the data and help inspectors and auditors to quickly identify possible violations. Based on survey results from provincial and territorial governments, the time to verify an ELD record is 14 minutes, as compared to 17 minutes to verify a paper daily log. Using a $39.89 hourly wage for inspectors, footnote 6 and the 3-minute time-saving estimation, multiplied by the estimated number of inspections that are conducted on drivers’ records of duty, the estimated benefits from inspector time savings would have a present value of $0.38 million. TC also estimates that ELDs would save provincial and territorial facility auditors 27 minutes per audit. Note that on average, auditors conduct 193 audits per year on federally regulated motor carriers. At an hourly wage rate of $50.48 for auditors, the present value of the total time saved during facility audits is estimated at $49,710. The combined present value total of time savings for the provincial and territorial governments is $0.43 million.

Motor carrier clerical savings

Given that ELD records will be automatically transmitted and stored, it is assumed that motor carrier clerical personnel would no longer need to handle paper daily logs manually. Carriers suggest that clerical employees normally take about 3.5 minutes to file each paper daily log that has been received from a driver. This will result in annual time savings of 14 hours (=3.5 minutes × 240 daily logs/60 minutes per hour). Multiplying this time savings by an estimated hourly wage rate of $27.04 for carrier clerical staff results in a present value of total clerical time savings of $136.81 million.

Paper log book savings

ELDs will eliminate the need for paper logbooks. Market information suggests that a one-month per driver supply of daily logs costs about $3.50, amounting to an annual value of $42 per driver. Multiplying this value by the estimated number of affected drivers will result in significant cost savings, with a present value of $8.24 million. There will also be environmental benefits with reduced paper consumption and the corresponding impact on landfills.

Reduced OOS detention time

ELDs can minimize non-compliance by automatically recording driving time (which accounts for most on-duty time); increasing the accuracy of the driver’s record of duty status and making it more difficult to exceed allowable driving hours. Serious HOS violations can result in OOS orders where further operation of a CMV by its driver is prohibited for a specified period of time or for some violations, until a required condition is met. The department reviewed national data on the volume and type of HOS violations and estimated that an annual average percentage (2.81%) of provincial and territorial inspections results in HOS OOS orders over the past five years (2009–2010 to 2013–2014). By applying this to the number of yearly driver inspections, the OOS orders that will be issued every year is estimated. The data further suggested that the average detention time was 34 hours per OOS order.

At the hourly rate of $29.25 for drivers, the present value of the total saved income loss due to the OOS detention time is approximately $5.36 million. Note that this quantified saved income loss only represents a portion of the total benefits from reduction of the detention time given that many other benefits are difficult to quantify, such as the potential to reduce driver fatigue and the risk of fatigue-related crash injuries and fatalities.

Reduction in fatigue-related crash risk

By reducing HOS violations and opportunities for drivers to exceed allowable limits, it is expected that the use of ELDs can reduce a portion of the crash risks that result from driver fatigue. The National Collision Data Base contains data on all motor vehicle collisions reported annually by provinces and territories to Transport Canada. Using these data and figures from 2007 to 2017, it is estimated that there were approximately 4 fatal, 9 major, 49 minor and 21 minimal accidents annually due to federally regulated commercial vehicle crashes where fatigue or falling asleep were main contributing factors. Considering the proportion of the number of CMVs per year that are expected to operate with ELD due to the amendments, future fatigue-related injuries are estimated.

Data demonstrates that most CMV fatigue-related collisions involved drivers that were operating within allowable HOS limits. It is estimated that 5% to 10% of CMV drivers operate in excess of allowable limits. However, it is likely that drivers who are involved in fatigue-related crashes are more likely than the average CMV driver to operate beyond the allowable HOS limit. For this reason, the central analysis assumes that 10% of drivers involved in crashes operate in excess of allowable limits, and that ELDs will reduce these HOS violations. TC also assumes an ELD effectiveness rate of 10% in reducing fatigue-related crashes.

To value avoided injuries, TC takes into account the severity of the injuries by using fractions of values of a statistical life (VSL), which is estimated at $6.11 million for a fatality (in 2004 Can$). A study of Canadian motor vehicle collisions estimated fractions of VSL to value different motor vehicle injury severities. On this basis, the estimated value associated with the avoided injuries is $156,159. A similar process is used to monetize avoided property damage. The present value of the latter is $81,530.

However, this estimate of the safety benefit is likely to be substantially understated as it takes a conservative approach that is focussed only on police-reported crash data. Drivers are often very alert after involvement in a crash and are not motivated to self-report their own decreased alertness to the police. There is an international consensus that fatigue is associated with 15% to 20% of crashes in transportation. The results of the American Large Truck Crash Causation Study (LTCCS) suggested that errors and lapses by a driver were the critical reasons for 44% of the crashes reviewed and that driver fatigue was found to be one of the most frequent associated factors with a contribution of 13% towards the total. Although it cannot be quantified or monetized, the true benefits of the prevented crashes may be up to 10 times greater than what is demonstrated in the crash data. Beyond the effects of reduced crash risks, research has shown that HOS regulations can have a number of benefits to the occupational health of drivers which have also not been monetized for this study. footnote 7 For sensitivity analysis, lower and higher values for HOS violation and effectiveness rate have been taken into account.

Costs

The amendments will directly impact federally regulated truck and bus motor carriers; the drivers operating commercial vehicles who are required to maintain daily logs; accredited certification bodies and ELD providers; as well as federal, provincial and territorial governments. The present value of the costs of the amendments is estimated at $299.19 million over a 10-year period, with $297.24 million attributed to motor carriers, $1.42 million to drivers, and $0.52 million to provincial and federal governments.

Costs to truck and bus motor carriers

Mandating the use of ELDs includes costs incurred by the motor carrier for acquisition, installation, activation and monitoring. The average lifespan of ELDs is assumed to be 10 years, so it was assumed that it would remain functional during the entire 10-year analysis period. According to industry feedback and input from multiple ELD suppliers, the costs of ELDs at an entry or middle level, which the vast majority of carriers would use, could range from $300 to $900. There is a likelihood that portable ELD applications entering the market could push the costs down even further. Therefore, it is assumed that the acquisition cost of an ELD device is $600, and that the associated installation cost is $220 per device. The ELD activation fee is a one-time only fee that is estimated at $15 per unit.

Another cost item related to the use of ERDs and ELDs is the monthly monitoring service fee, which is approximately $30 per month, for current ERDs users. Based on TC expert opinion, the certification requirement will make the monthly monitoring fee increase within a range of 2% to 10%. Due to uncertainty on the cost of certification requirements and how much of the cost will be transferred to carriers through monitoring fees, it is assumed that the increase in monitoring fees follows a triangular probability distribution bounded by a 2% minimum value and 10% maximum value, with a mode value of 5%. The mean value for the increase in monitoring fees is $1.67 per month. footnote 8 Costs of removing the ELDs from replaced vehicles were not considered.

To calculate the number of ELDs that would be needed under the amendments, TC considered that new vehicles would be added to the truck fleet to deal with increased demand due to economic activity and to replace old trucks that would be retired from the fleet. TC estimated that on average, trucks in the federally regulated fleets would have a lifespan of 6 years, and for buses it would be 15 years. Vehicles added due to increased demand would need a new ELD, while those that are replacing retired CMVs would simply have the ELD device transferred to the new vehicle. Based on these assumptions, the present value of the total costs associated with the ELD acquisition, installation, activation and monitoring service is estimated at $242.65 million.

Mandating the use of ELDs is expected to improve compliance with the HOS rules. The percentage of drivers that are exceeding allowable HOS limits is estimated at approximately 5%. Motor carriers may have to hire additional drivers and/or purchase additional vehicles in order to redistribute the workload to compensate for an anticipated reduction in driving and on-duty time per driver. The associated costs can include hiring and recruiting expenses for new drivers; a higher wage rate as a result of increased demand for drivers; and purchase and maintenance costs of additional CMVs.

The February 2014 FMCSA Regulatory Impact Statement that accompanied the U.S. ELD Supplemental Notice of Proposed Rule-Making estimated that the total cost for all CMVs in the U.S. to reach full compliance was approximately $790.00 million footnote 9 over 10 years (in 2013 US$), which was based on a non-compliance rate of 6.5%.

Using the HOS compliance costs estimated in the U.S. and after adjusting for the exchange rate, the inflation rate and the difference in non-compliance rates, TC estimates an HOS compliance present value cost per CMV of about $185 per vehicle. Given the estimated HOS compliance cost per CMV in Canada and the number of CMVs requiring ELDs from year to year, the present value of the full compliance costs is $54.60 million.

Costs for drivers

Drivers may need training in order to be familiar with ELD functionality and/or to be able to accurately read and understand the display or printout structure of the ELD for compliance verification purposes. The estimate of training costs for drivers takes into consideration the total expected number of CMV drivers in the compliance year, noting that only those who have previously taken the HOS and daily log training and who will continue to stay in the industry will need to be retrained. ELD training costs for new drivers entering into the industry in the following years will not be included as it is assumed that the costs of receiving ELD training are included in the costs of receiving HOS and paper daily log training. Further, for the sake of simplicity, it is also assumed that drivers moving from one carrier to another (turnover within the industry) are able to use other ELDs without any further training requirement, even if the ELD devices may be slightly different.

It is calculated that a total of 33 830 drivers will be trained during the compliance year. The industry estimates that the average driver training cost is $48 per driver. It follows that the present value of the total training costs for drivers is approximately $1.42 million.

Cost to federal government

Transport Canada will incur costs associated with the accreditation of certification bodies, which will be responsible for conducting the assessment and certification of ELD models that vendors make available for motor carriers and drivers to use. The accreditation process consists of interested parties submitting an application to Transport Canada to become an accredited certification body. Transport Canada will assess the applicants for conformity to a certification standard, accredit the successful applicants and provide ongoing monitoring of the certification bodies.

Transport Canada will incur most of their costs within the first six months of the certification period. The accreditation process is expected to require the equivalent of one full-time employee responsible for assessing and reviewing applications. Although there might be additional costs beyond the initial six months of the certification period, if more parties become interested in obtaining accreditation, these costs will be negligible. The present value total cost associated with the accreditation process was estimated to be $59,371.

Costs for inspectors and auditors (provincial and territorial governments)

Roadside inspectors and auditors also need to be trained on the ELD functionality. There are approximately 1 052 roadside inspectors and 102 auditors employed by the provincial and territorial governments. These inspectors and auditors are expected to enforce the ELD mandate in the same way that they currently enforce the federal and provincial HOS rules for roadside inspections and during facility audits of the motor carriers. Using information provided by nine jurisdictions, TC estimates that the average inspector/auditor training cost is about $457 per person. The present value of the total training costs is $0.42 million for inspectors and $40,710 for auditors, for a total of approximately $0.46 million.

Costs to accredited certification bodies and ELD providers

ELD providers that want to offer approved devices for motor carriers to use are expected to submit their devices to a certification body (accredited by TC). The devices will undergo tests for compliance in accordance with the criteria set out in the technical standard and the Regulations. It is estimated that one to three certifying bodies will apply for accreditation. ELD providers will pay the certifying bodies to have their devices certified. The costs incurred by ELDs providers are expected to be passed on to CMVs carriers and captured in terms of increase in monitoring costs.

Cost-benefit statement

In terms of quantified costs and benefits, the present value of the net benefits is approximately $81.15 million, resulting in annualized value of $11.55 million (see Table 3).

As mentioned in the discussion above, the benefits consist of efficiency and safety benefits. The total value of the benefits is $380.33 million. Efficiency benefits result in a total present value of $380.10 million, while safety benefits amount to $0.24 million. The total cost of the amendments is $299.19 million. During the compliance year, the present value of the cost will be $49.81 million, including both industry and government costs, with an annualized total cost of $42.60 million.

Table 3: Cost-benefit statement (in millions)

 

Dollar Year

Base Year

Discount Rate

Final Year

Total Net Benefit (present value)

Total Annualized Net Benefit

2018

2019

7%

2028

$81.15

$11.55

A. Quantified impacts

Compliance Year:
2021

Average Annual 2022–2027

2028

Total (present value)

Annual Average

Benefits

Efficiency benefits

$54.09

$47.43

$41.43

$380.10

$54.12

Safety benefits

$0.04

$0.03

$0.02

$0.24

$0.03

Total benefit

$54.12

$47.46

$41.46

$380.33

$54.15

Costs

Costs for industry

$49.28

$36.43

$30.81

$298.66

$42.52

Costs to provincial & territorial governments

$0.47

$0.00

$0.00

$0.47

$0.07

Cost to federal government

$0.06

$0.00

$0.00

$0.06

$0.01

Total cost

$49.81

$36.43

$30.81

$299.19

$42.60

Net benefits

$81.15

$11.55

B. Quantified impacts in non-$

Positive impacts

  • Improved harmonization with the U.S.
  • Enhanced carriers’ capacity to move goods or passengers
  • Increased customer satisfaction through delay reduction due to less OOS orders
  • Meeting public expectations for safer transportation in Canada
  • Improved quality of life for drivers

Sensitivity analysis

Single-variable sensitivity analysis

A single-variable sensitivity analysis was conducted to examine the impact on the net benefits of only one variable at a time. The following variables are considered: phase-in periods, planning horizons and discount rates.

In the central analysis, it is assumed that after the certification of ELDs is completed, industry would have approximately 12 months to comply with the amendments and implement ELD technology to record daily logs. Even though TC expects that most of the industry would require simple software updates or ELD activation to implement the amendments, part of the industry would need to acquire, install and activate an ELD on their CMVs. For the purpose of estimating the cost, the sensitivity analysis was conducted to examine an 18-month phase-in period.

The analytical timeframe in the central analysis is a 10-year planning horizon, so that the analysis period is from 2019 to 2028. A significant portion of the costs will be incurred in the compliance year, as drivers, inspectors and auditors must be trained, and CMVs with no FMS will need to be equipped with the devices before being able to operate them. A sensitivity analysis considering longer time horizons is also presented below.

In the central analysis, a 7% discount rate is used, in accordance with Treasury Board Secretariat guidance on cost-benefit analysis. For sensitivity analysis, a 3% discount rate and undiscounted values are also considered. Table 4 shows the net value of the amendments for the above-mentioned parameters.

Table 4: Single-variable sensitivity analysis

Parameter Changes

Net Benefit (in millions)

Cost-Benefit Ratio

Phase-in Periods

12-month phase-in

$81.15

1.27

18-month phase-in

$67.81

1.26

Planning Horizons

15 years

$132.06

1.30

20 years

$178.43

1.33

Discount Rate

3%

$112.74

1.32

10%

$116.58

1.55

Scenario sensitivity analysis

As mentioned in the “Cost-benefit analysis” section, there are a number of assumptions where variability can be present. To address the effect of the uncertainty and variability on these assumptions, a scenario sensitivity analysis was conducted where lowest and highest costs and benefits were considered. In addition to the central scenario, two scenarios were analyzed to determine the effect of different assumptions on different variables and the examination of outcomes using extreme values was considered. The extreme values are calculated for the following variables: percentage of drivers operating over allowable limits, the effectiveness rate of ELDs on reducing fatigue-related crashes, and the estimated time saved by drivers when using ELDs as opposed to paper logs.

For the first scenario, the lowest possible benefits and highest possible cost are estimated. In this scenario, the percentage of drivers operating over the allowable limit is 10%, the rate of effectiveness of ELDs reducing fatigue-related crashes is 5%, and the time saved due to ELDs is 9.5 minutes per daily log per driver, and 3.5 minutes for clerical staff. This analysis results in a net present value of $26.44 million.

The second scenario is one where the highest benefits and lowest cost are considered. Using a rate of 2.8% for drivers driving over the allowable limit, a rate of 15% for ELD effectiveness on fatigue-related crashes, and a time saving estimate of 11 minutes per driver per daily log, the net present value for the proposed amendments is $173.68 million. Table 5 presents the present value of total costs, benefits and net value for the two scenarios discussed, as well as for the central scenario.

Table 5: Sensitivity analysis: scenario analysis (in millions)

Scenario

Highest Cost, Lowest Benefits

Central

Lowest Cost, Highest Benefits

Cost

$353.78

$299.19

$275.27

Benefits

$380.21

$380.33

$448.94

Net value

$26.44

$81.15

$173.68

Monte Carlo simulations

A sensitivity analysis often considers what happens to the net benefits value when the variables change at a time and when they take their extreme values. However, for both methods there is no consideration regarding the probability associated with the net values.

A Monte Carlo simulation was performed to measure how often the net benefits will be less than the central value (expected net benefits). In other words, what percentage of the time will the net present value of benefits be less than the central value. The ELD cost per unit as well as the increase in monthly monitoring fees are assumed to follow a triangular distribution. The results from the simulations indicate that 49.94% of the time, the net present value of the benefits is less than the central value.

Distributional analysis

Cost per CMV category

The amendments will result in costs to CMV carriers that depend on the type of daily log recording that they are currently using. Canada-based CMVs that operate into the U.S. are expected to experience increased monthly monitoring fees. The same is true for CMVs that operate within Canada and have activated ERDs. On the other hand, CMVs that have an FMS on board, but do not have an activated ERD, will have to incur activation costs and will begin paying ELD monitoring fees. Lastly, CMVs that do not have an FMS or an ERD will have to acquire, install and activate the device, in addition to ongoing monitoring costs. Table 6 shows the number of CMVs, the incremental requirements and the annualized incremental cost per CMV category.

Table 6: Incremental cost per CMV category in the next 10 years

Commercial motor vehicles (CMV) category

Annualized Incremental cost per CMV

Canada-based CMVs that operate into the U.S.

$13

Canada-based CMVs that operate within Canada

Activated ERD

$13

Non-activated ERD

$256

No hardware

$352

Benefits for affected stakeholders

The amendments will benefit drivers, clerical staff and CMV owners by decreasing the time spent on daily log completion and eliminate the cost of logbooks. Drivers will spend less time filing required information in paper logs, and will no longer need to submit logs to carriers. Clerical staff will no longer need to file paper logs, as all this information will be collected electronically. In addition, CMV owners will no longer need to purchase logbooks, as ELDs will collect all the required information. Table 7 presents the total benefits due to the reduction of time and logbook expenditures.

Table 7: Benefits by affected stakeholder and activity

Stakeholder

Type of Benefit

Total
Benefits
(in millions)

Driver

Time saved from completing and submitting daily logs

$229.26

Clerical staff

Time saved from filing daily logs

$136.81

CMV owners

Logbook cost savings

$8.24

Total benefits

 

$374.31

“One-for-One” Rule

The amendments will result in a reduction of administrative burden and are considered to be an “OUT” under the “One-for-One” Rule. It is projected that the regulatory changes will result in a net decrease in annualized average administrative burden costs of $27,302,094, or $2,832 per business. footnote 10

These administrative savings are due to staff time savings (drivers and clerical staff time) from the elimination of the requirement to maintain paper daily logs.

Driver

TC assumes that on average, each driver needs to complete 240 daily logs per year and that using ELDs would save about four and a half minutes per daily log. As a result, each driver will save approximately 18 hours per year when it comes to maintaining a daily log. In addition, when drivers use paper logs, they must forward their logs to carriers. ELDs will eliminate the time spent on the transmission of daily logs to drivers, as they transmit this information automatically to carriers. Since it is assumed that each daily log submission takes about five minutes and that drivers submit daily logs 25 times a year, it follows that 2.08 hours would be saved for every driver annually. Therefore, from both maintaining and submitting a daily log, a total of 29.25 hours per driver will be saved as a result of this regulatory amendment. Applying a wage of $28.36 for drivers, an estimate of the savings can be calculated based on the average number of drivers per company (see Table 8).

Table 8: Number of firms and drivers
 

Number of Firms

Number of Drivers

Average Number of Drivers per Firm

Trucking companies – Large

124

27 640

223

Trucking companies – Small

9 414

53 209

6

Bus companies – Large

9

2 499

278

Bus companies – Small

93

1 571

17

Total

9 640

84 919

9

Based on the average number of drivers per firm and the cost savings per driver for daily log completion and submission, the present value of the total time savings for drivers is $120.61 million, or approximately $17.17 million on an annualized basis (see Table 9).

Clerical staff

Given that the electronic data associated with records of duty status will be automatically transmitted and stored, it is assumed that carrier clerical personnel will no longer need to handle these documents manually. Motor carriers suggest that it takes about 3.5 minutes to file each paper daily log that has been received. Assuming that drivers submit 240 daily logs per year, ELD usage will result in annual time savings of 14 hours for filing paper logs. The estimated hourly wage rate for the clerical staff of carriers is $27.04. Using these numbers and the estimated average number of drivers per firm, the total clerical time savings over the 10-year period are estimated at $71.14 million. Table 9 summarizes the cost reduction from ELDs by saving type.

Table 9: Cost reduction for drivers and clerical staff (in constant 2012$)

Type of Cost Savings

Total Savings

Annualized

Driver daily log completion

$108,115,976

$15,393,282

Driver submission of daily log

$12,498,538

$1,779,511

Clerical staff filing

$71,143,864

$10,129,301

Total

$191,758,481

$27,302,094

Small business lens

The majority of motor carriers are small businesses (more than 90%). Therefore, the small business lens applies to these regulatory amendments. The reduction in administrative costs will be particularly beneficial to smaller carriers, as they may not have the same back-office systems in place to monitor and manage drivers’ records. Lower costs and less time to manage records will allow smaller operations to increase productivity.

TC is sensitive to the possible cost impact these regulatory changes could have on smaller businesses. Although a shorter implementation period would allow the benefits from ELD usage to be realized sooner, including significant administrative cost savings, that approach would represent higher initial costs to carriers. To address these concerns, an implementation period of 12 months after the certification period has concluded was included for all carriers, including the small businesses. The 12-month implementation period will provide greater flexibility through additional time for ELD installation (e.g. more opportunities for installation to be combined with maintenance or replacement of vehicles to reduce the incremental costs). The annualized compliance costs and administrative cost savings per small business are presented in Table 10.

Table 10: Compliance cost and administrative cost savings per small business

 

Annualized Total

Annualized per Driver

Annualized per Business

Small businesses (truck)

Cost

$40,382,511

$759

$4,290

Benefits (cost savings)

$51,238,486

$963

$5,443

Net benefit

$10,855,975

$204

$1,153

Small businesses (bus)

Cost

$1,866,310

$1,188

$20,068

Benefits (cost savings)

$2,817,101

$1,793

$30,291

Net benefit

$950,791

$605

$10,224

Regulatory cooperation

Without the requirement to use ELDs and to align with the U.S. obligations, competitive inequities between Canadian carriers travelling domestically and those travelling to the U.S. could be intensified if the ELD requirements are different. Moreover, Canadian carriers who travel domestically would gain a competitive advantage, and could circumvent HOS rules, as they are currently not obligated to use ELDs. The amendments harmonize Canadian regulations, to the extent possible, with U.S. requirements to use ELDs, promoting regulatory alignment as well as fair competition. Commercial vehicles will need only one ELD to be compliant in both countries, which should not result in any impediments to trade.

The amendments will create some Canadian-specific requirements to reflect the Canadian regulatory and enforcement framework. The amendments will not mirror the U.S. requirement for providers of ELDs to self-certify and register their devices, but rather Transport Canada will accredit certifying bodies to test ELDs and certify them as compliant with the technical specifications in the Technical Standard and the Regulations.

Transport Canada had proposed to mirror the U.S. requirements for addressing malfunctions of ELDs, which allowed paper daily logs to be used until the ELD had been repaired or replaced. The department had proposed that the provincial and territorial governments administer requests from the motor carrier for extensions beyond the 8-day repair time limit. However, there were strong objections from most provincial and territorial governments to taking on this function, given the uncertainty regarding the volume of extension requests that might occur. As a result, Transport Canada is increasing the time limit to repair or replace the ELD from 8 to 14 days, or until the current trip has been completed. The driver will be permitted to use a paper daily log during that time period and must indicate in the paper daily log that the ELD has a malfunction. The ELD will need to be repaired or replaced within 14 days and before the CMV is dispatched. The motor carrier will be required to maintain a register of the details of malfunctions, which may be subsequently reviewed by an investigator or facility auditor.

As a result of enforcement challenges with the U.S., raised from provinces and territories, the types of supporting documents outlined in these amendments differ from those in the U.S. The amendments identify categories of documents, which for the most part, are already retained by motor carriers for other business and taxation purposes.

Finally, the amendments include fewer exemptions from the ELD requirements than those in the U.S. Several stakeholders requested exemptions but provided little information to support their requests. If stakeholders believe that they qualify for an exemption, they can apply for a statutory exemption, which could be granted if it is determined to be in the public interest and not likely to affect motor carrier safety.

Consultation

Transport Canada announced that the federal government intended to mandate the use of ELDs on February 16, 2016. Industry groups such as the Canadian Trucking Alliance (CTA), a federation of provincial trucking associations representing the trucking industry and carriers, have long called for federal leadership and a universal mandate to require the use of ELDs as a proactive measure to reduce falsification of driver log books.

Prior to this, the CCMTA had initiated development of the ELD Technical Standard in 2010, based on a previous iteration of the U.S. proposed rule. The CCMTA’s ELD working group, co-chaired by Transport Canada and the Province of Ontario with the technical assistance of a consultant, also included representation from seven other provincial and territorial governments, various motor carrier groups and providers of ELDs.

The department circulated a regulatory pre-consultation survey during the summer of 2016 to seek preliminary views on the broad policy issues from 27 industry stakeholders, 18 ELD suppliers and the 13 provincial and territorial governments. The survey sought input on a variety of matters including the length of the implementation period.

In early 2017, the department also conducted an additional consultation with provincial and territorial governments regarding key policy issues related to ELDs that were under consideration. These issues included the motor carriers, drivers and transportation activities that would be subject to ELD requirements, and those that would be exempt; the timeframe for industry to comply with the requirements; and the grandfathering provisions for the use of electronic recording devices. Provincial and territorial governments provided few comments regarding the policy issues, but several of the jurisdictions expressed support for proceeding with the amendments. These amendments were prepublished in the Canada Gazette, Part I, on December 16, 2017, followed by a comment period of 60 days. Transport Canada received 51 comments from the industry, provinces and territories, and members of the public. The following key issues were raised in the comments.

1. ELD certification: Provinces and territories, and a significant number of industry stakeholders supported creating a third-party certification requirement for ELDs. They expressed a lack of confidence in the effectiveness of a self-certification process, as implemented in the U.S., to ensure that ELDs meet the Technical Standard and that records of duty status are reliable.

Based on these comments, Transport Canada has decided to create a third-party certification process for ELDs. In order to comply with these amendments, all ELD models used by motor carriers and drivers will need to be certified.

2. Implementation period: In their submissions to the consultation draft, the majority of stakeholders supported a two-year implementation period to allow sufficient time for motor carriers to acquire and test ELDs, and provide training. Provinces and territories supported a two-year implementation period in order to amend provincial legislation, develop and deliver training for inspectors and auditors, educate and engage carriers, and address any technical issues. However, since then the Canadian Trucking Alliance and the Private Motor Truck Council have pressed for an earlier implementation period, ranging from 12 to 18 months. The provincial and territorial governments now support the industry’s desire for an accelerated implementation period.

The amendments will include a 24-month implementation period as it provides adequate preparation time for stakeholders and allows for the benefits of ELDs, such as cost savings and restoration of fairer competition, to accrue as quickly as possible.

3. Grandfathering: Transport Canada will eliminate the proposed two-year grandfathering period for ERDs, as it is no longer considered necessary. Transport Canada had assumed that most ERDs would need to be replaced. Approximately 86% of CMVs have either an ERD or U.S.-compliant ELD installed in the vehicle. ELD providers advise that they will be able to upgrade these devices to be compliant with the amendments through a software upgrade, which, in most cases, would be deployed to the motor carrier at no additional cost, through an over-the-air software push directly to the ELD. By not having to replace their existing ERD hardware, motor carriers will need little time to become compliant and will avoid the cost of replacement. ELD providers will be able to focus their efforts during the implementation period on those motor carriers that do not have any devices in their commercial vehicles. The grandfathering period is not needed given the upgrades can be done quickly, at little to no cost to the motor carrier, and with minimal impact on the ELD providers.

4. Supporting documents: While many industry stakeholders supported harmonization of the supporting documents requirements with U.S. rules, some provinces and territories highlighted enforcement challenges with limiting the types and number of supporting documents a motor carrier must retain, before the reliability of ELDs had been proven. Jurisdictions were concerned that the proposed provisions did not include some supporting documents, such as government-issued documents and toll receipts, which are considered beneficial to roadside enforcement in their efforts to both detect non-compliance by the driver and verify that the ELD was recording duty status accurately. Provincial and territorial governments were also of the view that motor carriers would be able to select certain supporting documents for retention that were less beneficial to facility auditors when trying to detect non-compliance. As a result, Transport Canada has revised the amendments to no longer limit the number of supporting documents that must be retained by a motor carrier for 6 months after the documents were received. The amendments also identify the types of documents which constitute supporting documents. Motor carriers already retain many of these documents for tax and operational purposes.

5. Malfunctions of ELDs: Provinces and territories opposed assuming the responsibility to process carrier extension requests for time to repair or replace malfunctioning ELDs. As a result, the amendments impose firm deadlines for motor carriers to repair or replace malfunctioning ELDs, prevent the CMV and its ELD from being dispatched until repairs or replacement of the malfunctioning ELD are completed, and require motor carriers to maintain a registry of ELDs within their records.

6. Transmission of records of duty status and supporting documents to the motor carrier: The proposed amendments established a shorter time period (13 days) for the driver to electronically transmit ELD records to the motor carrier than that for the transmission of paper daily logs. The transmission of paper daily logs was given additional time (20 days) because the driver either had to mail them to the motor carrier or turn them in after their current trip was completed. Provincial and territorial governments were of the view that the motor carrier needed to concurrently receive the ELD records and the corresponding supporting documents to ensure effective oversight of driver compliance with the HOS limits. The proposed time period of 13 days was sufficient for the electronic transmission of the ELD record, but was likely not sufficient time for the supporting documents, many of which could be in paper form and take longer to transmit. In addition, some drivers make trips that could last several weeks, so the driver would be unable to concurrently comply with both the 13-day transmission period requirement and the need for the driver to have in their possession all of the supporting documents for the current trip. To address these concerns, the amendments harmonize the requirement for the driver to forward to the motor carrier either paper daily logs or ELD records, and their corresponding supporting documents, with the current rules established with respect to paper daily logs.

7. Cybersecurity: Several stakeholders raised cybersecurity concerns, including the protection of ELD data in cases of equipment theft, hacking, and data manipulation. The CCMTA has ensured that ELD cybersecurity issues and vulnerabilities have been addressed in the Technical Standard. ELDs will need to meet these criteria to be certified.

Further exemptions from HOS or ELD requirements: Several commenters requested exemptions from some or all of the HOS requirements, such as increasing the commercial vehicle weight threshold, an exemption for technicians and sales people for which driving a commercial vehicle is ancillary to their function, exemptions related to the 160-km radius from the home terminal, increasing the allowable driving hours for drivers encountering adverse weather or unforeseen delays for livestock haulers, and exemptions for the film industry. The proposed amendments did not alter the application of the Regulations or the HOS limits for drivers, so these requests are not addressed in the amendments. Transport Canada is committed to harmonization with Standard #9 — Hours of Service of the National Safety Code for Motor Carriers, which is almost identical to these Regulations. These requests for exemption represent deviations from Standard #9. Transport Canada will forward these issues to the CCMTA and ask that they be addressed as part of any review of Standard #9.

There was also a request for exemption from the ELD requirements for the driveaway and towaway vehicle sector. These drivers drive vehicles to dealers and auction houses almost daily and sometimes over long distances. Transport Canada reviewed their rationale for an exemption and concluded that there was insufficient justification to warrant an exemption. The department believes that this sector will be able to comply with the amendments by using portable ELDs and plugging them into the electronic control module port under the dash of each vehicle operated. However, this sector and other stakeholders seeking an exemption from these amendments can apply for one under the provisions of the Motor Vehicle Transport Act. Exemptions from the Regulations can be granted if it is determined that the issuance of the exemption would be in the public interest and not likely to affect motor carrier safety.

Technical Standard: There were several comments submitted relating to the Technical Standard, mostly from ELD providers. Transport Canada transferred them to the CCMTA to have them addressed. A working group, consisting of representatives from Transport Canada and the provincial and territorial governments, amended the Technical Standard and circulated it to industry and ELD providers for review and comment. As part of the process, Transport Canada also had discussions with stakeholders with respect to the certification transition and implementation periods. The Technical Standard was approved by the CCMTA on April 11, 2019.

Rationale

With the implementation of the U.S. final rule on December 18, 2017, it is estimated that almost half (47%) of federally regulated CMVs now have ELDs installed. While the current Regulations do not prevent the use of ELDs, only a mandatory requirement would ensure a level playing field for federally regulated motor carriers by ensuring that the records of duty status are more accurate and that allowable driving hours are not exceeded. Adoption of ELDs will significantly reduce the administrative burden for motor carriers in their efforts to provide safety oversight in their operations, while drivers will need less time and effort to maintain their records of duty status. Improved compliance with HOS requirements will also help reduce fatigue-related crashes, injuries and fatalities.

The provincial and territorial government will also benefit from reduced inspection time and improved enforcement tools to detect potential violations of the HOS regulations.

All Canadian and U.S. motor carriers engaged in cross-border trade are using U.S.-compliant ELDs and it is expected that the vast majority of these ELDs will also be compliant, or close to compliant, with the amendments at the time they come into effect. Compliant ELDs should be readily available to motor carriers before and after the requirements come into force — Transport Canada does not anticipate shortages and prices should remain affordable. Provincial and territorial inspectors and facility auditors are expected to be experienced at inspecting electronic ELD records by the time the proposed ELD requirements come into force, given that a significant majority of CMVs will already have adopted the technology. A two-year implementation period will enable motor carriers to select, acquire and install the ELDs into their fleets.

Implementation, enforcement and service standards

Implementation period

After publication in the Canada Gazette, Part II, there will be a 24-month implementation period to allow time for the certification of ELD models and their implementation by motor carriers. This will ensure that all motor carriers, including small businesses, will have adequate time to select, acquire and install the ELDs and train their drivers on how to use them. During the implementation period, provincial and territorial governments will need to train their inspectors and auditors and integrate changes to their enforcement programs and activities. After the conclusion of the 24-month implementation period, all federally regulated motor carriers and their drivers will be required to use compliant ELDs.

Enforcement

Provincial and territorial governments oversee all roadside enforcement and conduct facility audits of safety compliance documentation at the motor carrier’s facilities. The enforcement community has been conducting HOS enforcement on those using ERDs for many years now and, in recent years, have begun to do the same with U.S.-compliant ELDs that are used by motor carriers and their drivers who travel to the U.S. The amendments will adopt precise technical specifications and regulatory requirements for such devices and will significantly increase the volume of drivers that will be using a device rather than paper daily logs.

Provincial and territorial governments will need to provide additional training for their enforcement personnel and develop enforcement procedures to prepare for implementation. They may choose to develop software tools that could help reduce inspection time and identify potential violations. The department intends to encourage them to adopt their own ELD rules in order for the safety and competitive benefits of ELDs to be fully realized throughout the Canadian road transportation network.

Contact

Mark Schauerte
Chief, Motor Carriers
Multi-modal and Road Safety Programs
Transport Canada
330 Sparks Street
Ottawa, Ontario
K1A 0N5
Email: mark.schauerte@tc.gc.ca